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Billions Of Dollars To Be Invested By TikTok In Southeast Asia To Expand Its E-Commerce Division

Billions Of Dollars To Be Invested By TikTok In Southeast Asia To Expand Its E-Commerce Division
As it doubles down on the region amid increasing international scrutiny over its data security, China's ByteDance, the owner of the short video app TikTok, announced on Thursday that it would invest billions of dollars in Southeast Asia over the coming years.
Southeast Asia, which has a population of 630 million people, half of whom are under 30, is one of TikTok's largest user markets, bringing in more than 325 million monthly users.
The site, however, has struggled to convert its massive user base into a significant source of regional e-commerce revenue because of the stiff competition it faces from larger rivals like Sea's Shopee, Alibaba's Lazada, and GoTo's Tokopedia.
"We're going to invest billions of dollars in Indonesia and Southeast Asia over the next few years," TikTok CEO Shou Zi Chew said at a forum it organised in Jakarta to highlight the social and economic impact of the app in the region.
Although TikTok did not disclose a full breakdown of the budget, it did state that it will spend money on advertising, encouraging aspiring small business owners, and providing training.
Chew claimed that as its user base grows and the platform moves beyond advertising into e-commerce, enabling customers to make purchases through links on the app while livestreaming, the site's content is growing more varied.
In Southeast Asia, TikTok has 8,000 employees and 2 million small sellers selling their goods on its platform, with Indonesia being the largest economy in the area.
According to figures from consultant Momentum Works, regional e-commerce transactions hit around $100 billion last year, with Indonesia contributing for $52 billion.
In Southeast Asia, TikTok facilitated $4.4 billion in transactions in 2018, up from $600 million in 2021, but it lagged well behind Shopee's $48 billion in regional product sales in 2022, according to Momentum Works.
The announcement of TikTok's investment plan comes as the Chinese-owned firm is under investigation by certain countries and regulators on worries that Beijing may exploit the app to collect user data or further its own objectives.
A number of nations, including Britain and New Zealand, have blocked the app from being used on official cell phones, actions that TikTok claimed were motivated by broader geopolitics and based on "fundamental misconceptions".
TikTok has consistently denied sharing data with the Chinese government and stated that it would not do so if requested.
Although there have not been any significant bans on the app on government devices in Southeast Asia, its content has drawn attention.
After officials in Indonesia temporarily banned TikTok for posts they claimed featured "pornography, inappropriate content, and blasphemy," the country faced one of its first significant international policy difficulties in 2018.
Vietnamese regulators announced that they would look into TikTok's operations there because of the platform's "toxic" content and the danger it posed to the nation's "youth, culture, and tradition."

Christopher J. Mitchell

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